Filed personal 7, now they're after the corp.

[holycowe]

My wife filed chapter 7 over 2 years ago included 2 wf business cards total 30k and discharged.
Now wf recovery dept. go after her S-corp for those 2 acct. The business has 2 employees including herself. And her business also bank with wf as well.
There's no way she can afford the settlement they're asking 20k.
My question is, can she close that corp. down and I'll open another one (same place) so she still has a job?
And they can take the money out of her business acct. anytime they want or they have to ask for it from the court?
Thanks all

[frogger]

Presuming a few things here:

Your wife had signed a personal guarantee to WF.
The corporate debt in question was included in her personal bk filing.

If this is the case, then you're on the right train of thought of closing the corporation down. You actually should have done that when she filed for bk personally, and then this would no longer be an issue.

As to taking money out of her account, they "shouldn't" be able to do that unless she has either:
A. Signed paperwork authorizing it.
B. With a valid court order.

Get the money out, and get it out now.

And as to the new corporation that you're planning, make sure that the name is at least more than a little different.

Good luck.

[holycowe]

I got it, thank you for your respond.
Yes, she was personal guaranteed and both acct. already discharged on her name. That's why they're after her business now.
I'll open another business acct. and another bank acct. This week
It's service business, the money go straight to that bank everyday

Business assets less then 10k. I guess I'll have to deal with that later.

[LadyInTheRed]

If the corporation has assets, I don't think you can simply distribute those assets to the shareholder and close the corporation without paying the creditors at least the value of the assets. If you do this, the creditors may have a new claim against your wife that arises after her BK. You can probably diminish the assets by paying payroll and taxes as both of those get priority over other creditors. I suggest you consult with a corporate attorney before transferring any assets out of the corporation without the corporation receiving adequate consideration.

[holycowe]

The business is still operating.
I know it's a long process to do and might still have problem in the end.
But this person is so tough to deal with. Wanting 20k to settle or $200 a month payment arrangement.
The previous person asked for 12k settlement or $150 a month.

I might just open another bank for the business for now so they can't take the money out anytime time they want

[holycowe]

What's the worst case scenario if she doesn't do nothing? They sue the company and take the assets and sell it or payment arrangement right? (I know they don't want to take those used equipments)

[LadyInTheRed]

I might just open another bank for the business for now so they can't take the money out anytime time they want

A creditor cannot take cash from the corporation's account without getting a judgment.

[LadyInTheRed]

What's the worst case scenario if she doesn't do nothing? They sue the company and take the assets and sell it or payment arrangement right? (I know they don't want to take those used equipments)

The worse case is that they get a judgment, force liquidation of the corporate assets and then, if the assets aren't sufficient to pay the debt, they try to pierce the corporate veil so they can pursue your wife personally. The BK discharge may not protect her from that kind of action if it is based on fraud or on other actions taken after the BK. Hopefully, your wife has followed corporate formalities and the corporation has not been run recklessly. Here's an article on piercing the corporate veil. http://www.nolo.com/legal-encycloped...eil-33006.html

[holycowe]

I don't want to see it goes that far. Can't afford 1 shot settlement and end up with another 1099 at year end.
I'm trying to make payment arrangement monthly as low as possible but now they're asking for too much @ $300 per month. She doesn't want to lose the business

[LadyInTheRed]

The worse case scenario won't necessarily happen, especially if the corporation has been run by the book. If she dissolves the corporation, the bank very well may go away. But, she should be sure to use the correct procedures to dissolve the corporation. It would be worth paying an attorney for an hour or two to get some good advice.

[holycowe]

Thanks ladyinred, the thing is she doesn't want to close or dissolve it. At least she still have a job there along with one more girl she works with.
I thought about closing it and open another one in MY name but it's too much time and money involve and in the end, we still have to deal with the shop assets.
I hope they can take $100 a month.